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Profiling the nonprofit leader of tomorrow

By Feature, Leadership

By Jean Crawford, contributor, Ivey Business Journal |

The nonprofit sector’s ability to provide its services has come under ever-increasing pressure with changes in public policy, significant client demographic shifts, new commercial initiatives, and growing competition from for-profit providers. Although the sector has responded creatively in many instances, the increasingly complex environment is straining the skills and abilities of nonprofit leaders to meet such demands.

Whether in the profit or the nonprofit sector, all organizations fundamentally need strong leadership talent to execute their strategy successfully. Therefore, ensuring a steady supply of leaders is critical. This is not an easy task.

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Why the world needs tri-sector leaders

By Feature, Leadership

By Nick Lovegrove and Matthew Thomas, contributing writers, Harvard Business Review |

The critical challenges society faces — such as water scarcity, access to education, and the rising cost of healthcare — increasingly require the business, government and nonprofit sectors to work together to create lasting solutions. But this is only possible if the senior executives of our leading institutions are what Dominic Barton, Worldwide Managing Director of McKinsey & Company, refers to as “tri-sector athletes” — leaders able to engage and collaborate across all three sectors.

Our research at The InterSector Project shows that these leaders often have prior experiences in each sector and a unique ability to navigate different cultures, align incentives and draw on the particular strengths of a wide range of actors to solve large-scale problems.

Take water scarcity. A potential 40 percent gap between global freshwater demand and supply by 2030 puts billions of lives — and dollars — at stake. And all three sectors have skin in the game. For agri-food and beverage businesses, fresh water is an essential ingredient in their production process. Governments are often the stewards of water and regulate its use. Nonprofits work to ensure access to clean water and conservation of watersheds and the environment.

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In the ‘reverse Peace Corps,’ future leaders hone skills

By Feature, Leadership

By Frances Stead Sellers, senior writer, The Washington Post |

After the speeches, the presentation of certificates and the photo op come the slightly sophomoric awards you might expect at an eighth-grade graduation. Graduation day at the Washington International School? A fin d’annee fete for Model U.N. students? Or some hug-the-globe gig for junior diplomats that Secretary of State John F. Kerry dreamed up?

No, this is the 15th graduating class of Atlas Service Corps, a Washington-based nonprofit founded in 2006 with the goal of creating a “global network of changemakers.” At a time when terrorist groups win attention for recruiting disillusioned young Westerners to join them, Atlas Corps is acting as a “reverse Peace Corps,” aiming to identify outstanding young nonprofit leaders around the world, and to bring them to serve and share their overseas experience for a year or so in the United States before they return home to apply their new skills. After a recent endorsement from the State Department, the fellowship has attracted as many as 1,000 applicants a month.

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How to develop as a nonprofit leader

By Feature, Leadership

By Bridgespan writers |

Many people who are working within the ranks of nonprofit organizations could become great senior nonprofit leaders. However, in part because of budget constraints, few organizations in the sector have formal professional development programs to prepare mid-level managers for senior roles. As a result, most mid-level nonprofit professionals must take responsibility for their own career development.

One way to begin the process is to tap the experience of senior leaders who already have worked their way up within the sector. To that end, we spoke with six senior nonprofit leaders — all of whom have spent much if not all of their careers working in the nonprofit sector — about their career paths and the lessons they learned along the way. We also asked what advice they would give to mid-level managers looking to move into senior nonprofit leadership roles.

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BKD Foundation’s 2014 charitable giving surpasses $10 million

By Fundraising, Sponsor Insight

The BKD Foundation is the firm’s charitable arm. The BKD Foundation is solely funded by BKD partners’ and employees’ monetary contributions. It aims to enrich the communities BDK serves through financial donations and volunteerism. The foundation supports not-for-profit organizations of all types and sizes, including employees serving in volunteer roles.

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Supporting youth organizations

While the BKD Foundation provided support to a number of Indiana organizations, it made significant contributions to causes that serve the state’s youth. Junior Achievement of Central Indiana, The Villages, Big Brother Big Sisters of Northeast Indiana and Boys & Girls Club of Evansville are just a few of the organizations that benefited from foundation dollars. But the support went beyond monetary, numerous employees also regularly volunteered.

Outside of youth-specific charities, the Indianapolis and Bloomington BKD offices continued its five-year donation commitment to the Eskenazi Health Foundation for its violence intervention program and to the Community Foundation of Bloomington and Monroe County, a nonprofit that supports local charities.

Indiana BKD employees personally went above and beyond with charity efforts by donating both money and time — to Habitat for Humanity homebuilding efforts, the Salvation Army Toy Town toy drive, the March of Dime and many more.

Surrounding communities

The Fort Wayne and Merrillville offices sponsored The Carriage House Dancing with the Fort Wayne Stars event. Several BKDers also volunteered to tabulate votes and help with event-related activities throughout the year.

In Evansville, the team chose to support Community One, a local nonprofit dedicated to housing restoration and community development needs.

To learn more about the foundation’s support, browse the digital version of the 2014 foundation report.

Leadership transition – Who’s up next?

By Leadership, Sponsor Insight

By Bryan Orander, president, Charitable Advisors

For 15 years, research has warned of the unprecedented number of nonprofit executive directors/CEOs expected to change organizations, retire or leave the sector. In the original Daring to Lead study in 2001, two thirds of nonprofit executive directors did not believe in five years that they would still be with their current organization. Updates to this study in 2006 and 2011 found surprisingly similar results.

Though the recession definitely stalled those predicted leadership changes and retirements, nationally the nonprofit sector has begun to see these predicted changes. Recently, The Boston Globe reported on transitions in the Northeast, and in Central Indiana, every few weeks brings news of another executive who has set a date to move on to his or her next adventure or has given his or her board notice of an upcoming retirement.

Who is replacing those departing long-time executives?

In the past several years through my consulting work with nonprofits to help guide changes of leadership, I have seen these changes firsthand.

People often ask about these CEO/ED transitions. Typically, I approximate statistics based on my recent work; however, I thought it time to take a closer look.

To make the math easier, I took the last 25 leadership transitions and looked at some key factors. These go back approximately five years. The organizations have ranged in size from annual budgets of a few hundred thousand dollars to over $20 million and staff teams from three to more than 500. Most client organizations have been in the $1-10 million range.

Two qualifiers: Charitable Advisors is most often contracted for planned transitions and most of clients did not have internal candidates or potential successors that applied for the ED/CEO role.

Here is a quick snapshot.

Where did the CEO/ED go?

  • 16 retirements = 64 percent
  • 4 board terminations = 16 percent
  • 3 CEOs took another job = 12 percent
  • 2 new organizations, with no previous ED = 8 percent

Was the successor hired for the position an internal or external candidate?

  • 20 external hires = 80 percent
  • 5 internal hire/promotion = 20 percent (seven searches had internal candidates)

What is the background/sector of the successors?

  • 10 program = 40 percent, including two from government
  • 7 fund development/policy = 28 percent
  • 4 CEO/ED from another nonprofit organization = 16 percent
  • 4 corporate sector = 16 percent, three of the four had been

volunteers or board members for the organization that hired them

From these numbers, I think there are a few insights that can be drawn and useful to board members and senior staff looking to future leadership changes.

  • Internal successors are the exception because so few organizations have additional leaders with a broad organizational understanding and skill set. Of the 25 transitions, seven had internal candidates. Of those seven organizations, five selected the internal candidate as the next ED/CEO.
  • An organization’s next CEO/ED has probably not been a CEO before. Confirming national research, like Daring to Lead, most new ED/CEOs are coming from the leadership team of another nonprofit but were not in an ED/CEO role.
  • Few leaders make the jump directly from corporate America without having served as a board member or volunteer. Search committees look at a broad range of candidates, but are often most comfortable with people who fit the traditional nonprofit skill sets and culture.
  • A next leader is increasingly likely to bring a fund development background versus a programmatic background. Traditionally, the leaders of small to mid-sized nonprofits have come from the program ranks because the emphasis was on serving clients well. While that client emphasis continues, nonprofit boards are increasingly concerned with the leader’s ability to attract resources to grow and sustain the organization.

Your plan of action 

Ensuring capable staff leadership is one of a nonprofit board’s most important roles. Whether the reason is retirement, illness, resignation, dismissal or transitions, the change can put your organization and the people you serve at risk.

Here are a few things that staff and board leadership can do over the next month or two, if you haven’t already, in preparation for an eventual transition.

  • Be prepared for the inevitable. In many organizations there is such a reliance on the CEO/ED so that when that person leaves or is terminated, the board feels uncertain about who is in charge and what comes next. A brief emergency succession conversation at an executive committee or board meeting every year is critical.

   Charitable Advisors has developed a template that boards have found useful. For a copy of this easy-to-use emergency succession plan, please email me at: Bryan@CharitableAdvisors.com  

  • Build your staff and management team. Every nonprofit should aspire to grow future leaders. The ideal circumstance is for an organization to have one or two viable internal candidates when it launches its search for a successor. However, most nonprofits are small and have few, if any, managers except the CEO/ED. Even larger nonprofits have a management team composed of specialists in finance, programming, fund development or human resources, and often lack the organizational-wide perspective of the CEO/ED. So you may not have internal candidates without an intentional development effort to broaden individual leadership experience.

 

  • CEO/ED sets the tone in developing leaders. The current CEO/ED and how he or she works with the staff team sets the stage for the next generation of organizational leadership. A CEO with a controlling style is less likely to develop strong leaders as potential successors either because those people aren’t hired, they leave or they are never groomed for more responsibility. Growing your team prepares for the future and can make the ED/CEO’s job easier by spreading the load.

bryanBryan Orander is founder and president of Charitable Advisors. After 18 years of for-profit leadership in the Fortune 50 business world and a disability-related nonprofit, Bryan joined a large regional accounting and consulting firm. In 2000, he founded Charitable Advisors with the vision of going beyond traditional consulting to become a connector, advocate and problem solver for the nonprofit sector.

Goodwill’s approach to growth: one view

By Feature, Leadership

By Lynn Sygiel, editor, Charitable Advisors |

For Kent Kramer, the answer was easy. As a candidate earlier this year for the president’s position at Goodwill of Central Indiana, he was asked to title a chapter in Goodwill’s history book that would describe his future tenure.

Kramer’s answer: Tipping point.

His explanation: “I look at some of the initiatives that we have going on, they’re on the verge, a tipping point. When you have that critical mass of activity, and it hits that tipping point, all of a sudden the impact becomes enormous. And that’s where I feel we are on an education front and definitely on workforce development,” said Kramer.

Goodwill and Kramer understand that balancing growth and scale also means understanding and respecting their complex interplay.

Kramer was hired as vice president of retail in 2002. His task was to grow Goodwill’s retail revenue. But growth for growth’s sake was not the goal. Goodwill’s board saw the additional revenue as a way to boost its mission.

In his first 10 years, Kramer and his team were successful in increasing revenue from the retail side. They boosted the number of stores to 52 from 24 and grew the number of employees at those stores to 2,200 from 700. Since then, new concepts like e-commerce and outlet and boutique stores have been introduced. Goodwill’s Central Indiana staff is now at 3,200, and last year, 30 Goodwill agencies from around the country visited Indianapolis to learn more about retail growth.

But that’s not all that’s grown. Kramer saw the organization’s work with people and families take a more holistic approach. Although Kramer is proud of opening those stores, he sees the broader effect of increased revenue. Goodwill has taken on a larger mission – helping people get to economic self-sufficiency. Two ways that Goodwill plays a significant role in reducing poverty and the array of accompanying social problems is through its Excel Centers and its Nurse-Family Partnership (NFP), both launched in the past decade.

Education has been part of Goodwill’s program portfolio since 2004, when it opened its first charter high school – Indianapolis MET High School. Since its opening, Goodwill has learned many lessons from that venture.

Those lessons spurred the opening in 2010 of the first Excel Center, a dropout recovery charter high school at Goodwill’s headquarters on Michigan Street on the city’s Westside. Designed for students 18 and older to gain a high school diploma, the first school had more of an online approach. Goodwill realized, however, that students needed an adult to coach them and hold them accountable, so the model was modified.

In 2014, Excel enrollment reached 3,000 with 501 graduates.

“We have Goodwill to surround these people. We help place them, we help coach them to success, we help knock down barriers that might still exist, and we stay with them to make sure they’re successful,” said Kramer. “All of our expansion efforts have gone to the Excel Center, and it’s kind of like, it’s on fire, and we want to keep feeding that fire because of the results.

“Let’s say, if only half of them of those come off of public assistance, that’s pretty significant,” Kramer continued.

Now there are 11 Excel Centers in Central Indiana, with two new locations in Noblesville and on the Southside near the University of Indianapolis. It has also licensed three centers through Goodwills in other cities — South Bend, Memphis, Tenn., and Austin, Texas. And in October, the Annie E. Casey Foundation is supporting the growth with a grant to bring 15 Goodwills from around the country to Indianapolis to learn more about the centers.

Continuous improvement is one of Goodwill’s key principles and its boards’ regularly review growth and impact. Goodwill has three boards – general operation, education and foundation. Each board requires that at a one-year anniversary, and then again at two years after an operation is in place that the staff dusts off the original proforma and matches it up with actual results.

“Basically at board meetings, we give a mission impact report. If we have underperforming programs, which we’ve had in the past, and if we’re not getting the impact we need, we’ve made that decision to remove ourselves from it,” Kramer said. “The last thing that we want to do is to take donations from either used-goods donors or cash donors, and invest in something that doesn’t have a mission return or an economic return. Ultimately we look for both.”

Goodwill also is always looking for better ways to analyze data to show how it is changing lives. In an 2013 economic impact assessment for Goodwill, for example, Ball State University found that in its first two years Excel Center graduates showed gains in average annual wages of $4,572.

So it’s not surprising that impact was a critical factor when Goodwill was researching the Nurse-Family Partnership (NFP) as a potential program to bring to Indiana. One of the attractions was that the program collected 2,000 data points for every client it serves and had nearly four decades of evidence to support its effect.

The program, headquartered in Denver, has a holistic approach to working with low-income mothers and their families. Each first-time mother is matched with a registered nurse who has regular contact with the family until the newborn turns 2 years old.

Since Goodwill of Central Indiana and the Indiana State Department of Health launched the program to Indiana in 2011, it has served 600 families. This year with additional support and connections to local Goodwill agencies, NFP announced programs for Lake, Madison, Delaware, Tippecanoe and White counties, and with support from private donors in Indianapolis, it will provide services to mothers living in high-risk zip codes.

But the program offers more than trying to ensure the health of a newborn. As the nurse and mother build trust, the nurse has conversations about family self-sufficiency and how this new mother might provide financial support for her family. Those conversations have led some of the mothers to enroll in the Excel program. Besides a high school diploma, the centers offer specific certifications for jobs like pharmacy technicians, electrical systems technicians, welders and information technology techs.

In order to initiate new programming, the ability to invest is critical. Expanding, according to Kramer, takes a good organizational financial backbone and cash to work with. With foresight 45 years ago, Goodwill established a foundation that allows investment in innovation and provides working capital to incubate ideas.

Growth, as Goodwill has learned, cannot always be achieved with existing staff.

“We had to hire those competencies. Sometimes when you’re growing and you’ve got an opportunity to grow fast, it’s difficult to have 100 percent home-grown talent.

“Goodwill historically has been a very entrepreneurial type organization, so you’ve got to have leaders that embrace that idea and embrace change, and not only embrace it but are change agents themselves. Status quo is a very difficult world to live in if you want to grow,” said Kramer.

Since Kramer was announced as Goodwill’s president, everyone asks him what’s next. For him, it’s not new projects, but moving things in a solid direction.

“We’ve got to be really good at keeping our eye on the ball on all of the three big opportunities — education, retail and Nurse Family Partnership — to make sure we’re efficient and delivering results. The ‘what’s next’ is getting really, really good at moving people to middle skills jobs. We’re doing it, but what’s next is ‘Watch us do it really, really, really good,’” said Kramer. “We haven’t finished. We still have lots of opportunities across our network to continue to grow.”

Tips for Overcoming Growing Pains

By Sponsor Insight

By Allie Petty-Stone

Like most nonprofits, you want to make the world a better place. With each positive result you gain, the more positive results you want to achieve.

However, as your achievements grow so will your organization. Are you prepared for this growth?

Growth is exciting, yet challenging, for both nonprofit and for-profit organizations. During the last few years, Alerding CPA Group has experienced significant growth, most recently through a merger. We have learned a lot in the process and thought your organization would benefit from the insights we have attained.

Our growth has demanded that we recruit and cultivate a strong team of leaders and client advisors. Internally, we have strategized about what practices have kept us strong and vital and which should be halted. Our common goal is preserving and enhancing exceptional service to our clients, while keeping our staff engaged and challenged.

If your organization is in the process of growth, it is best to keep these following tips in mind:

(1) Recruiting – Define the attributes that are truly needed beyond a boilerplate job description. Consider what WAS required and what is essential for the position(s). Job descriptions are a starting point, but what other characteristics do you desire in a candidate that would better serve the position. I personally find beginning anew the most exciting aspect of the career journey and am pleased to work with and welcome talented members to our staff.

(2) Orientation/training – Consider the immediate training needs of new staff members, especially entry level. Great managers are engaged with their staff and can identify what training tools they need NOW and in the future. It is best to cultivate their curiosity and to inspire staff to evolve in their current roles while visualizing what career possibilities lie ahead for them; it is best to note a staff member’s strengths. Once objectives are achieved, an employee may become bored and seek a purpose elsewhere. If he or she shows strength in IT processes, get him involved in those functions for his team or department.

(3) Leadership influence – Great leaders, no matter what their positions, share the company’s vision and values and live by them. They are constantly engaged in the day-to-day business and client relations. Eventually, employees take notice of this dedication and will buy-in and support this vision if they believe these core values are authentic. To this day, I can give you the name of every mentor who inspired me and how I wanted to mimic them.

(4) Team collaboration – There is nothing better than having new ideas infused in a conversation of what the department/organization is currently doing and how it can be improved. It provides the opportunity to constructively pave new paths. Business building takes work. I love getting feedback from a staff member that improves a documentation process. It means (a) he or she is taking notice; (b) he or she cares about my work; and (c) this staff member wants the firm to perform better overall.

(5) Problem solvingOne of my favorites. If a staff member has questions or concerns, it is important to ask in-person or make a phone call. Step outside simply sending an email and become accustomed to engaging in conversation. It is important to encourage problem solving. One of my favorite “mom-isms” is “You can’t come to me with a problem if you can’t offer a solution.”

(6) Humor and creativity – Add some humor and creative thinking to get around difficult issues. Regardless of generational or cultural differences, most people have a desire to make things better. Assist your staff with a smile and help diffuse concerns quickly. Never ignore problems or they can fester.

Growth can be overwhelming, so let’s also be realistic. We are fallible. Errors are made. Assumptions can be incorrect. The sooner you “right” the “wrong,” the better. Be accountable. Be forgiving. Be strong. Learn through mistakes and be the best version of a leader that you can imagine. Make it your daily mantra and your legacy. Your staff will be proud to work for you and your clients will appreciate doing business with you.

To find out how Alerding CPA Group may be of service to you, contact at 317-569-4181 or visit its website www.alerdingcpagroup.com.

Allie Petty-Stone is the firm administrator for Alerding CPA Group, an Indianapolis-based public accounting firm. She has 20 years experience in business operations.

Lack of money hampers expansion, study finds

By Feature, Fundraising

By Nicole Wallace, senior writer, The Chronicle of Philanthropy

Nonprofit organizations that want to spread their programs are having a hard time raising the money to expand, according to a new report.

The report is based on a survey of 436 nonprofit leaders, 325 of whom said their organizations were in the process of expanding. Yet only 24 percent of those groups have started fundraising campaigns to finance their planned growth, and those that have are raising an average of only 17 percent of what they say they need to carry out their expansion plans.

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